BHP on brink of lobbying own goal in front of shareholders

What’s the definition of victory at a shareholder meeting? The strict answer, when a simple majority is required, is one vote more than 50%. On that score, BHP looks safe. Early estimates suggest a resolution calling on the world’s biggest miner company to end its links to controversial lobbyists for the fossil fuel industry will attract support of only 20% or so.

Yet such a victory for BHP’s board would be hollow. This is an Anglo-Australian FTSE 100 company whose chief executive, Andrew Mackenzie, was widely praised for a speech in July in which he said global warming was “indisputable”.

Mackenzie said BHP would spend $400m (£320m) on developing solutions to cut carbon emissions from its operations, which span iron ore, coal, aluminium, copper, uranium and oil. And, in a first for a large miner, he said the firm would set public goals next year to reduce “scope 3” emissions, meaning those generated by customers further down the economic chain. By the standards of the industry, BHP was seen as a leader.

Yet, three months later, it finds itself in the firing line over an issue that looks the simplest to fix: cleaning up its lobbying operation by ensuring support is given only to bodies whose position is consistent with the goals of the Paris climate agreement. BHP was meant to have implemented such reforms as long ago as 2017. The Australian Centre for Corporate Social Responsibility, which filed the rebel resolution, says the company has failed to follow through.

Standard Life Aberdeen agrees, more or less. “Failure to implement effective governance of its industry group lobbying activities serves to undermine the integrity of BHP’s climate leadership position and causes damage to its reputation,” Bill Hartnett, the investment firm’s stewardship director, said this week.

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Look at the big investment names in the same camp: Axa Investment Managers, BNP Paribas Asset Management, Aviva Investors,CalPERS from the US, ACTIAM, a big Dutch fund, and more. The Church of England’s pensions board, a high-profile member of the group, calculates that the declared rebels manage about £4.5tn of assets globally. That is some serious mainstream opposition.

The row tends to focus on BHP’s membership of two organisations – the Minerals Council of Australia, the main lobby group for the country’s coal industry, and a related outfit called Coal21. For its part, BHP makes several arguments: that investors should wait for results of the latest review of membership of trade associations; that it got out of another body, the World Coal Association, after its 2017 study; and that “inside the tent” engagement has prodded Coal21 to change its constitution.

Such pleas, though, feel too feeble, too finessed, and simply not what was promised. The last straw for the opponents seems to have been Coal21’s plan to launch a pro-coal advertising campaign in Australia, a tactic near-impossible to square with BHP’s public declarations on Paris.

The first of two shareholder meetings takes place in London next week, so it’s not too late for the board to rethink. It should. BHP is on the brink of scoring a needless own goal.

Dyson’s electric car was always going to be a struggle

The sceptics were right. Designing and then building an electric car is hard, and has proved too hard for Dyson. The car itself was “terrific”, says Sir James, but commercial viability was out of reach. For the time being, it’s back to vacuum cleaners and hand dryers and, he hopes, pioneering new batteries.

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One must applaud the original ambition, of course, but the biggest obstacle always looked enormous – pure money. This was a £2.5bn venture, which sounds enormous until you remember what others are spending. Tesla, which has actual cars on actual roads, can still burn through $700m in an average quarter. Dyson was always going to struggle to match that spending.

The Thomas Cook director with the most questions to answer

Rachel Reeves, the chair of the business select committee, has started well with her Thomas Cook inquiry. She is summoning the company’s last three chief executives, the former chair, a brace of non-executives, the former chief financial officer and a pair of auditors.

Do not, though, let the size of cast obscure a central point. Why didn’t Thomas Cook tap shareholders for more cash when its share price was flying (relatively) high. As late as May 2018, the company’s equity was worth £2bn and a £500m rights issue should have been possible. Frank Meysman, the chair for nine long years, is the director with most questions to answer. He was invisible when calamity struck. Put him in the spotlight.


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